The RGD project will enable the development of new gas reservoirs, (Image source: ADNOC Gas)

ADNOC Gas has awarded US$5bn in contracts for the first phase of its Rich Gas Development (RGD) Project, its largest-ever capital investment

The contracts involve expanding key processing units to increase throughput and improve operational efficiency across the onshore Asab, Buhasa and Habshan facilities and the offshore Das Island liquefaction facility. The company intends to take FIDs on two additional phases of the RGD project at Habshan and Ruwais to boost production capacity to meet growing market demands.

The RGD project will enable the development of new gas reservoirs, which are key to boosting liquid gas exports, supporting gas self-sufficiency in the UAE, and providing essential feedstock to the country’s growing petrochemical industry. Phase 1 of the RGD project focuses on optimising and debottlenecking existing gas assets while unlocking new and valuable gas streams.

New contracts

EPCM contracts awarded for Phase 1 consist of a US$2.8bn contract awarded to Wood for the Habshan facility, one of the largest gas processing facilities in the world, US$1.2bn to Petrofac for the Das Island liquefaction facility and US$1.1bn to Kent plc for the Asab and Buhasa facilities.

At the Das Island liquefaction facility, Petrofac will provide EPCM services and oversee procurement and construction contracts to build a new inlet facility, two new gas dehydration and compression trains, each with a capacity of 420 million standard cubic feet per day (MMSCFD), and associated infrastructure. Petrofac will also upgrade existing facilities to increase the site’s capacity for collecting and transporting raw natural gas. These upgrades will significantly increase gas processing capacity to meet rising customer demand.

Located 160 km north-west of mainland UAE, the Das Island facility has been operational since 1977, and is the third longest LNG operation still in production globally. With a liquefaction capacity of six million metric tons per annum (MMtpa), it remains a key component of the nation’s LNG export strategy.

Wood’s EPCM package for the long-term gas processing facilities at the UAE’s Habshan facility includes the delivery of substantial upgrades and debottlenecking solutions to the existing Habshan and Habshan 5 gas processing mega-complexes and pipelines, including brownfield modifications and the installation of new facilities. Habshan is one of the largest gas process complexes in the world.

Ken Gilmartin, CEO at Wood, said: “ADNOC Gas’ RGD programme is pivotal to the UAE’s energy security strategy and broader economy. We’re proud to be at the heart of such a significant initiative.

“Wood gained extensive knowledge of Habshan delivering the front-end engineering design and we will deliver the EPCM phase while the facilities remain fully operational in order to sustain critical gas supply.”

Fatema Al Nuaimi, chief executive officer of ADNOC Gas, said, “The FID and contract awards for the first phase of the Rich Gas Development project mark a significant milestone in ADNOC Gas’ strategy to deliver +40% EBITDA growth between 2023 and 2029. This strategic investment is expected to deliver significant new value for our shareholders and enable continued sustainable growth for the company, our employees, and the UAE.”

Global upstream oil investment is forecast to decline this year.

Global upstream oil investment is set to fall this year for the first time since the Covid slump in 2020, with upstream oil and gas spending gravitating to the Middle East, according to the 2025 edition of the IEA’s annual World Energy Investment report

The forecast 6% drop, the steepest since 2016, is driven mainly by a sharp decline in spending on US tight oil, and reflects lower oil prices and demand expectations. Upstream natural gas spending is set to maintain the levels seen in 2024. Together, upstream oil and gas investment for 2025 is forecast at less than US$570bn, a decline of around 4%. Of this, 40% is dedicated to slowing down production declines at existing fields. Global refinery investment in 2025 is set to fall to its lowest level in the past 10 years.

In contrast, investment in new LNG facilities is on the rise, with new projects in the USA, Qatar, Canada and elsewhere set to come online. Between 2026 and 2028, the global LNG market is set to experience its largest ever capacity growth, with the USA set to nearly double its export capacity.

Global spending on upstream oil and gas is gravitating to the Middle East, the report finds, which is set to invest around US$130bn in oil and gas supply in 2025, around 15% of the global total. The region accounts for around 30% of global oil production and 17% of global natural gas production.

Saudi Arabia’s upstream oil and gas investment is the highest in the Middle East, and is set to reach US$40bn in 2025, nearly 15% higher than in 2015. In Qatar, domestic investment has ramped up sevenfold since 2015 with the accelerated development of the huge North Field, while foreign investment has quadrupled in the same period.

Global capital flows to the energy sector are is set to rise in 2025 to a record US$3.3 trillion, a 2% rise in real terms on 2024, despite headwinds from elevated geopolitical tensions and economic uncertainty, with clean energy technologies attracting twice as much capital as fossil fuels. Around US$2.2 trillion is forecast to be invested in renewables, nuclear, grids, storage, low-emissions fuels, efficiency and electrification, twice as much as the US$1.1 trillion going to oil, natural gas and coal.

This investment in clean technologies reflects not only efforts to reduce emissions but also the growing influence of industrial policy, energy security concerns and the cost competitiveness of electricity-based solutions, according to the report.

“Amid the geopolitical and economic uncertainties that are clouding the outlook for the energy world, we see energy security coming through as a key driver of the growth in global investment this year to a record US$3.3 trillion as countries and companies seek to insulate themselves from a wide range of risks,” said IEA Executive director Fatih Birol. “The fast-evolving economic and trade picture means that some investors are adopting a wait-and-see approach to new energy project approvals, but in most areas we have yet to see significant implications for existing projects.”

Also highlighted in the report is the dominance of China as the single largest investor in energy, with its share of global clean energy spending rising from a quarter to almost a third. “When the IEA published the first ever edition of its World Energy Investment report nearly ten years ago, it showed energy investment in China in 2015 just edging ahead of that of the United States,” Dr Birol added. “Today, China is by far the largest energy investor globally, spending twice as much on energy as the European Union – and almost as much as the EU and United States combined.”

The report also underlines the rise in electricity investments and the doubling of global spending on low-emissions power generation, led by solar PV, with investment in solar expected to reach US$450bn this year, making it the single largest global energy investment item. Battery storage investments are also climbing rapidly. Investment in grids, however, currently standing at US$400bn per year is failing to keep pace with spending on generation and electrification, with obstacles being lengthy permitting procedures and tight supply chains for transformers and cables.

Spending patterns remain very uneven globally – with many developing economies, especially in Africa, struggling to mobilise capital for energy infrastructure, the report finds. Today, Africa accounts for just 2% of global clean energy investment. Total energy investment across the continent has fallen by a third over the past decade due to declining fossil fuel spending and insufficient growth in clean energy. To close the financing gap in African countries and other emerging and developing economies, international public finance needs to be scaled up and used strategically to bring in larger volumes of private capital, according to the report.

Eight OPEC+ oil producers have confirmed they will hike production in July.

Eight OPEC+ oil producers have confirmed they will hike production in July, according to their previously agreed plan to unwind 2.2mn bpd in voluntary cuts from April 2025

The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman, will hike production by 411,000 bpd in July from the June 2025 production level.

In a statement, OPEC comments that this action is taken in view of the “steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories,” and in accordance with the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1 April 2025. It adds that the gradual increases may be paused or reversed subject to evolving market conditions, and that this flexibility will allow the group to continue to support oil market stability.

The eight OPEC+ countries also noted that this measure will provide an opportunity for the participating countries to accelerate their compensation. The eight countries reiterated their collective commitment to achieve full conformity with the Declaration of Cooperation, including the additional voluntary production adjustments that were agreed to be monitored by the JMMC during its 53rd meeting held on 3 April 2024.

They also confirmed their intention to fully compensate for any overproduced volume since January 2024. The eight OPEC+ countries will hold monthly meetings to review market conditions, conformity, and compensation.

The eight countries will meet on 6 July 2025 to decide on August production levels.

Despite the increase in supply, oil prices have held steady, with geopolitical tensions likely contributing, such as the Russia/Ukraine war, the release of the IAEA report on the Iran nuclear programme and potential supply disruptions in Libya and Canada.

Some analysts view the OPEC+ supply hike as reflecting Saudi Arabia’s attempt to regain market share, with its budget and spending plans under pressure.

Jadwa Investment, in its report on Saudi Arabia’s Q1 budget statement, notes that the Kingdom recorded a fiscal deficit of SR58.7bn in Q1-25, as revenue declined by 10% year-on-year due to lower oil revenue, while spending was 5% higher. Oil revenue declined year-on-year by 18% due to lower dividends from Saudi Aramco and lower oil prices.

“Oil revenue will remain under pressure in 2025 as oil prices have trended lower than in Q1 and output gains will only partly offset this,” it comments.

“The outlook for oil prices remains highly uncertain, and much will depend on the fortunes of the global economy during this period of volatile US policymaking. The evolution of OPEC+ policy is also uncertain and important.”

In its latest Oil Market Update, Jadwa remarks, “Global fundamentals may improve if US policymaking settles down, the US Fed finds room for more rate cuts, and China continues with stimulus. But, with oil inventories likely to build during 2025, further oil production growth and structurally slowing Chinese demand, the oil market may lack an upward catalyst.”

Under the deal, ADNOC Drilling will acquire eight land rigs in Kuwait and Oman. (Image source: ADNOC Drilling)

ADNOC Drilling has signed an agreement to acquire a 70% stake in SLB's land drilling rigs business in Kuwait and Oman, as it seeks to expand its regional footprint beyond the UAE

Under the deal, ADNOC Drilling will acquire eight fully operational land rigs under contract with the respective national oil companies (NOCs) of both countries, two in Kuwait and six in Oman. It will accelerate ADNOC Drilling’s expansion plans, providing it with a foothold into what it sees as two highly stable GCC markets with clear drilling plans driven by top-tier clients, in a move that will generate attractive returns.

Through this partnership, ADNOC Drilling will gain immediate access to earnings, cashflow and returns through the eight land rigs. This acquisition will enhance the company’s ability to deploy cutting-edge technologies, integrated drilling services, digital solutions and AI-driven efficiencies, according to the company – optimising performance, reducing environmental impact and driving value for customers across the region. The deal offers scope for ADNOC Drilling to acquire the remaining stake over time.

Abdulrahman Abdulla Al Seiari, ADNOC Drilling CEO, commented that the move is a “very exciting opportunity” for ADNOC Drilling, reinforcing its position as one of the leading companies in drilling and integrated services.

“Our partnership with SLB will provide ADNOC Drilling with a solid operational and financial platform to further expand in the region,” he said. “This business is well-established, profitable and operating with long-term contracts, making this a highly complementary and value-accretive addition to our portfolio. This move represents a calculated and cost-effective approach with a clear focus on financial discipline, value accretion and risk management.”

Jesus Lamas, president, Middle East and North Africa, SLB, added, “This partnership reflects the strong collaboration between SLB and ADNOC Drilling, and our shared commitment to driving value through collaboration across the region. We are confident that, working together with ADNOC Drilling, the business will continue to grow and deliver outstanding performance for our customers. We look forward to expanding our broader strategic partnerships with key regional leaders across the energy value chain, in line with SLB’s focused regional growth strategy."

ADNOC Drilling continues to record strong growth, fuelled by the expansion of its onshore and offshore fleets, as well as the continued growth of the oilfield services (OFS) segment and new joint ventures launched in 2024. The company now has the largest fleet in the Middle East, seeing net profits rise by 26% in 2024 to US$1.3bn.